AUTHORIZATION FOR DISTRIBUTION FORM Traditional, Roth, and Coverdell Education Savings Accounts

Transcription

1 USAA Federal Savings Bank McDermott Freeway San Antonio, TX AUTHORIZATION FOR DISTRIBUTION FORM Traditional, Roth, and Coverdell Education Savings Accounts ACCOUNT INFORMATION Please print the following information: USAA Number Name of Participant (responsible individual if Coverdell ESA) Beneficiary Name if Coverdell ESA DISTRIBUTION INFORMATION Type of account: Traditional Roth CESA IRA number: TRADITIONAL IRA DISTRIBUTION REASONS (ONLY) Select only one. Please refer to IRS Publication 590 for further explanation regarding distribution reasons. Normal: I am 59 1/2 or older. Premature Distribution: I am under 59 1/2 and am not taking a distribution due to disability or part of a series of substantially equal payments. I understand that if the amount distributed is not rolled over into another IRA within 60 days, the amount of the distribution may be included in my gross income subject to taxes and may be subject to an additional 10% premature distribution penalty. May not be subject to a premature distribution penalty if distribution is for: Qualified Education Expenses First Time Homebuyer Expenses Certain Medical Expenses Certain Health Insurance Premiums for the Unemployed Consult your tax advisor regarding whether you should file IRS Form 5329 to claim exemption from the premature distribution tax when you file your federal income tax return. Substantially Equal Periodic Payments (SEPP): I am under age 59 1/2 and wish to take a series of substantially equal periodic payments over my life expectancy or over the joint life expectancy of my designated beneficiary and I, in accordance with the provisions of the Internal Revenue code section 72(t). These payments must continue until the later 5 years or until I attain 59 1/2. Divorce: I am directing a distribution to be made to my former spouse in accordance with a divorce decree or property settlement agreement entered into as part of the settlement of a divorce action. If my former spouse wishes to maintain an IRA account with USAA or with another financial institution and does not already have such an account, I understand that an IRA Application and Adoption Agreement must be completed by them and submitted with this request. A certified copy of your divorce decree or property settlement prior to disbursement must be accompanied with your request. Continued on next page. Page 1 of

2 Disability: I am unable to engage in any substantial gainful activity because of medically determinable physical or mental impairment, and my physician has determined that my condition can be expected to result in death or to be of long, continued, and indefinite duration. Death: An executor, administrator or beneficiary following the death of the IRA account owner is completing this form. A certified copy of the participant s death certificate should accompany the form. If an executor or administrator is completing the form, it should be accompanied by letters of testamentary or letters of administration. Conversion: I wish to convert all or part of my Traditional IRA to a Roth IRA. [If I do not already have a Roth IRA with USAA FSB, this form should be accompanied by a new Roth IRA Application.] Conversions are taxable events and will be reported to the IRS by USAA on IRS Forms 1099-R and Recharacterization: I wish to recharacterize the IRA contributions described below by transferring the amounts indicated to another type of IRA, also described below pursuant to IRS Regulation 1.408A-5. Accordingly, I hereby direct you, as agent of USAA Federal Savings Bank, the custodian of my IRAs, to transfer, in a trustee-to-trustee transfer, the amount(s) indicated below to the account(s) which I designated. In that regard, I hereby certify that this direction is being given before the due date (including extensions) for filing my Federal income tax return for the taxable year for which the contributions were made. I understand that I should report the transactions generated by this request on IRS Form 8606, to be filed with my Federal Income Tax Return, and that these transactions will be reported to the IRS by USAA on IRS Forms 1099-R and Withdrawal of Excess Contributions (select one in A or B) Please indicate tax year: A. The following elections apply when the excess contribution is corrected BEFORE your tax filing date, including extensions: I am requesting that my excess contribution AND the excess earnings be withdrawn before I file my tax return. The excess earnings are included as income for the year in which the excess contribution occurred. The excess earnings may be subject to a 10% premature distribution penalty if I am under the age of 59 1/2 and not disabled. I am requesting that the excess contribution be carried over to a later year, for which I will reduce my IRA or Coverdell ESA contribution by the amount of excess contribution. The excess contribution will be subject to a 6% penalty tax for the year it was made and each subsequent year in which it is not corrected by under-contributing. The earnings on the excess will remain in the account. B. The following elections apply when the excess contribution is corrected AFTER your tax filing date: I am requesting a distribution of my excess contribution after the deadline for filing my tax return. The excess contribution will be subject to a 6% penalty tax for each year it remains in my account. If I took a deduction for the year of excess contribution, I will file an amended tax return removing the excess contribution. The earnings on the excess will remain in the account. I am requesting that the excess contribution be carried over to a later year, for which I will reduce my IRA or Coverdell ESA contribution by the amount of the excess contribution. The excess contribution will be subject to a 6% penalty tax for the year it was made and each subsequent year in which it is not corrected by under-contributing. The earnings on the excess will remain in the account. Page 2 of

3 ROTH IRA REASONS FOR DISTRIBUTION (ONLY) Qualified Distributions: I understand qualified Roth Distributions are not subject to taxes or penalties because I have met the 5-year aging period AND: I have attained the age of 59 1/2; or I am disabled; or Distribution is being made to a beneficiary in the event of the demise of the account owner. Roth IRA Distributions, Exception Applies: I understand that I have not met the 5-year aging period, but: I am at least 59 1/2; or Disabled; or Distribution is being made to a beneficiary in the event of the demise of the account owner. Roth Distributions, No Exception Applies: I am under 59 1/2 and none of the distribution reasons above apply. COVERDELL EDUCATION SAVINGS ACCOUNT REASONS FOR DISTRIBUTION (ONLY) Normal I am directing a distribution to be made to pay for the qualified higher education expenses of the designated beneficiary or for some other purpose with the understanding that the distribution may be taxable if the beneficiary does not have qualified education expenses which exceed the amount of the distribution in the current year. Disability The designated beneficiary has been rendered totally and permanently disabled. Death The designated beneficiary has died and a certified copy of his/her death certificate should accompany this form. Page 3 of

4 TYPE OF DISTRIBUTION Select ONLY one appropriate distribution type: Or Partial Withdrawal in the amount of $ At Maturity Immediately Total Distribution At Maturity Immediately Note: Upon FSB s receipt. I understand if a withdrawal is from an IRA Certificate of Deposit prior to maturity, substantial interest earnings penalties may be imposed because of early withdrawal. Or Regularly Scheduled Distribution (Interest Only Payments) NOTE: YOU MUST BE OVER THE AGE OF 59 1/2. Frequency: Annually Semiannually Quarterly Monthly METHOD OF DISTRIBUTION Choose one. If a selection is not made or the account requested is not on your profile, a check will be mailed to your address of record. Deposit to my existing non-ira USAA FSB Account number: Mail check to address of record. Deposit to my existing fund transfer account number: Page 4 of

5 INCOME TAX WITHHOLDING Federal: The distributions you receive from your IRA are subject to federal income tax withholding unless you elect not to have withholding apply. If you elect not to have withholding apply to your distributions; or if you do not have enough income tax withheld from your distribution, you may be responsible for payment of estimated tax. State: If federal income tax withholding is elected, some states require that we withhold state income tax. Based upon the state you reside in; a state specific form may be required to elect or not elect to withhold state taxes. If a form is required, a completed form must be received before your request can be processed. Note: If no tax is withheld you are still subject to federal and state tax on this income. You may be subject to penalties under rules for estimated tax if your payments of estimated tax and federal or state withholding tax, if any, are not sufficient. Your withholding election will remain in effect until revoked by you in writing. Note: Distributions from Roth IRAs are not considered taxable income. Federal: I elect NOT to have federal income tax withheld from my IRA distribution. I DO elect to have federal income tax withheld at the rate of % or in the amount of $. (Cannot be less than 10% of the total distribution.) IF NO ELECTION IS MADE, THE STANDARD AMOUNT OF 10% WILL BE WITHHELD. (30% will be withheld if you are a non-u.s. citizen residing outside the United States.) State: I elect NOT to have state income tax withheld from my IRA distribution. I DO elect to have state income tax withheld at the rate of % or in the amount of $. X Signature of Account Holder Date (MM/DD/YY) Page 5 of